The main features provided by the Canadian permit
Today, many firms prefer to operate in North America because it is home to many crypto enthusiasts and a significantly developed economy. An MSB license in Canada will provide excellent business development and expansion prospects. This growth is ensured thanks to political and financial stability in the state and the loyal requirements of the authorities for the economic activities of firms.
Types of organizations
Firms are divided into two categories: FMSB and MSB. Form FMSB is a non-banking company that operates within the state but is physically located outside it. Form MSB is a non-bank organization that operates domestically and is physically located within Canada’s borders.
Opportunities for financial institutions
Let’s consider what services a company like MSB and FSMB can provide.
Opportunities for an MSB
Let’s consider what aspects the organization will be regarded as an MSB. Firstly, if the organization provides at least one of the following services:
- conducting currency transactions;
- exchanging one type of digital coin for another;
- making financial transfers, including as an intermediary (payment of bills, utilities, salary transfers, mortgages).
Secondly, if the company issues and clears money orders, traveler’s checks, and the like, except for cashing checks made out to a specific person. Thirdly, the firm provides services related to digital coins:
- exchanging fiat funds for digital coins;
- exchanging one type of crypto assets for another;
- transfer and receipt of crypto;
- provide a platform for collecting fiat funds or digital coins.
In addition, an organization will be regarded as an MSB if the following factors apply:
- The company does business in Canada and has a physical office in the country; the organization employs local employees and a branch of the firm has been opened in Canada;
- the firm is licensed for one of the services listed above;
- your company attracts clients through the media, advertising, TV, and the Internet to use these services;
- carry out currency transactions of more than 1000 USD in one transaction or per transfer.
- the firm pays income tax on at least one of the above services.
Thus, if a company has MSB status, it is provided with a wide range of financial activities, including digital currency.
FMSB firm opportunities
Let’s consider in what cases an organization will be regarded as an FMSB and what types of financial activities it will relate to. The company provides at least one of the services classified as MSB, but under the following conditions:
- The organization is not registered, does not have a real office in the state, and does not employ local employees;
- company provides services within the country that are considered marketing and advertising, has a website with the “.ca” domain, or is listed in the Canadian Directory of organizations;
- the company provides its services to persons in Canada, and registration, bank cards, temporary residence for study or work, and persons on vacation demonstrably determine this.
We examined how the two categories of financial firms that provide their services within the state differ.
What is required to obtain an MSB activity permit?
To carry out legal financial activities, the firm must fulfill specific requirements. First of all, there must be a physical office registered in Canada. Registration is carried out in FINTRAC. The company is required to comply with all demands related to financial risks. To do this, it is necessary to appoint a responsible manager. The company’s activities must include adherence to AML and KYC policies.
In addition, it is necessary to prepare the company’s financial statements and comply with confidentiality conditions. Managers must provide a paper confirming the absence of a criminal record from the state where they are citizens. Also, at least one of the directors must have a diploma in economic education.
Despite strict legislation and regulatory oversight, this country is an attractive jurisdiction for financial activity. The stable atmosphere of the state allows you to do business with prospects for active development effectively.